What Does Incidents of Ownership Mean?
Incidents of ownership is a legal term that indicates control over a property. When an individual gives away their property but retains incident of ownership, they retain the right to collect rent from it. This distinction is useful for reducing the tax burden in estate transfers.
Insuranceopedia Explains Incidents of Ownership
Incidents of ownership refer to any control over property. By appealing to the concept of incidents of ownership, owners can give away property while retaining certain rights to it, such as the right to receive rent. This transfer does not legally count as a gift, allowing the transfer to occur while circumventing gift taxes.
In insurance policies, incidents of ownership refers to the right of the insured to:
- Change the beneficiary of the policy
- Revoke an assignment
- Pledge the policy for a loan
- Surrender or cancel a policy
- Assign the policy
- Obtain a loan from the insurer against the surrender value of the policy